KARACHI: The stock market could not maintain the upward trajectory regained two days earlier and declined on Thursday over increasing economic instability and lack of positive triggers.
The benchmark KSE 100 index witnessed a decline of 159.84 points, or a decrease of 0.39 percent to eventually close at 40,724.41 points. The total volume of scripts was 92.535 million valued at Rs5.084 billion. Meanwhile, the lower bench KSE 30 index declined by 77.27 points (0.41 percent) and close at 18,713.45 points. The total volume of scripts was 54.672 million.
There was encouraging investment in the banking sector as the finance ministry affirmed that inflation would be eased out. Global rating agency Moodys has also reaffirmed the banking sector outlook as stable for next 12-18 months, citing robust funding and liquidity. It stated that the credit profile has improved in the past months benefiting the banks due to links with government securities.
The government is facing a tough review of the second quarterly review of the bailout package secured from the IMF last year. A delegation of the financial institution is currently in Islamabad to pave the way forward before releasing the second tranche of $450 million.
The fiscal deficit has ballooned to 2.3 percent of the GDP in the first half of the current fiscal year. The government will have to convince the IMF that it will reduce expenditures and raise revenue. This implies that a mini-budget is inevitable and prices are expected to rise further.
The new wave of inflationary measures is looming over the stock market which has faced a dismal week over lack of positive and economic triggers. The stock marker partially recovered on Tuesday over the decision of the Economic Coordination Committee (ECC) to delay a hike in gas prices. The upward trajectory could be maintained and market slumped after it reopened after a day’s closure.
On the global front, stocks surged after US President Donald Trump was acquitted in an impeachment trial on charges of abuse of power and China announced a tariff cut to US imports. China’s stock market has been reeling to the outbreak of the novel coronavirus which has stopped supplies of goods and flights by several major airlines have been suspended.
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